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2016 AAP Annual Conference
Empowering Independent Pharmacies
2016 AAP Annual Conference
Empowering Independent Pharmacies
Industry Update & Trends
Craig S. Stern, PharmD, MBA, FASHP, FAMCP, FCPhA President
Pro Pharma Pharmaceutical Consultants, Inc.
April 15th, 2016
2016 AAP Annual Conference
Empowering Independent Pharmacies
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
The Journey What We Know
The Current Model – Managed Care
The New Drivers
Fundamentals of the Market
New Models -- Population Health
Value Chain – Pharmacist Involvement
Payment – Value
Outcomes
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Source: IMS Health, Market Prognosis, September 2015; IMS Institute for Healthcare Informatics, October 2015
Note: Growth is shown in constant US$ with an exchange rate adjustment in the Other category as the aggregate difference between constant and forecast
exchange rates. Brands lower spending due to loss of exclusivity (LOE) is shown for developed markets only. Brand spending in 2020 will be $120Bn greater than 2015 including $298Bn of growth and offset by $178Bn of LOE. Spending is shown at list and invoice price levels and does not reflect off-invoice discounts and
rebates.
* Generic in developed markets includes Generics +$24Bn, Non-original Brands +$23Bn, OTC +$10Bn.
** Other includes Rest of World +$21Bn and exchange rate effects +$26Bn.
Drivers of Spending Growth
2015-2020 US-$BN
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Source: IMS Health, Market Prognosis, September 2015; IMS Institute for Healthcare Informatics, October 2015
Historical Rx growth has been between 1% and 3.5%, (it was much lower during the economic crisis) and is
expected to be between 2% and 3% through 2018
Historic and Forecast Dispensed
Prescription Growth
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Specialty growth rate is 23% compared to traditional growth at 8% YTD
Source: IMS Health, National Sales Perspectives, Sept 2015
Specialty Sales Growth Outpaces
That of Traditional Medicines
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Principles of Managed Care:
Historical Rate Setting for Specific Healthcare Services
Fees Set According to a Sliding Scale Ability to Pay
Owners Pay for Healthcare for Slaves
Objective Outcome Measurement Standards to Assure Quality of Care
Outcomes Information Management to Include Data Collection and Evaluation
Consumer and Patient’s Rights Publicized, Explained and Made Known
Codex Hammurabi, 1700 BC
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Current Movements
Health Care Delivery and Financing
Population Health Management
Pharmaceutical Marketplace
Data and Technology
Pharmacy Workforce
Patient Empowerment
Ethics Ref: Future Trends Affecting Pharmacy Practice, Fred M. Eckel, Pharmacy Times, February 2016, page 16
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
4 Pillars of Primary Care
First
Contact
Continuity
Comprehensiveness
Coordination
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Traditional SILO Model:
Site of Care Centered
Patient Inbound: Evaluation → Triage
•Acute Care
•Sub-specialist
•Ambulatory: Pharmacy
•Laboratory
•Etc.
Procedure / Treatment
•Acute Care: ICU / Surgery / Procedure
•Subacute: Support
•Ambulatory: Rx
Patient Recognizance
•Follow UP
•Compliance
•Personal Responsibility
•Nutrition / Weight / Activity
•Hygiene
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2016 AAP Annual Conference
Empowering Independent Pharmacies
Predictions Based on
Market Influencers
Volume to Value →
No Value, No Money
• Transparency in all elements
of care including cost
• Regulatory experiments in
quality and reimbursement
• All risk, capitated payment
Patient → Price sensitive
consumer
• Comparative quality assessments
• International market forces
• Ethics / Character
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2016 AAP Annual Conference
Empowering Independent Pharmacies
Drivers of Change
Volume Transition
• Fee-for-Service
• Asymmetric Knowledge of
Service Requirements &
Pricing
• Drug Mix Moving to
Expensive Specialty
Medication Options
• Cost Shifting to
Members/Subscribers
To… VALUE
• Capitation
• Transparency
• Consolidation of Plans,
PBMs, Providers
• Restricted Choice – Provider
Panels, Pharmacy Networks
• Expertise Emphasis on Clinical Outcomes
Production
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Patient and Consumer Centered Model
• Caregiver Specialty
• Type of Intervention
• Site of care
• Coordination of Care
• Treatment
• Prevention vs. Treatment
• Severity
• Level of Intervention
• Effectiveness
• Risk
• Affordability
Outcome Patient /
Consumer Inbound
Triage Management
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Model Shift:
Managed Care to Population Health
Technology enablement for placing patient at the
center of the care paradigm
ACOs , Medical Homes and the role of pharmacists
PBM to PBA?
Outcomes measurement and the role of data
analytics
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2016 AAP Annual Conference
Empowering Independent Pharmacies
Value Chain: Pharmacist Integration
into Care Coordination
Inbound Patient Selection
CMR / MTM Outbound Coordination of Care
Rx Logistics Service Patient & ACO
ACO / PCMH Infrastructure
Human Resource Management: Coordinating Care
Data / Analytics
GPO Contracting with Manuf/ Drug Acquisition / Drug Distribution
Prim
ary
A
ctiv
itie
s Su
pp
ort
A
ctiv
itie
s
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Pharmacist as Providers
Physician Extenders
Subspecialty Expertise
Value Chain – Providers, Data Analyzers,
Administrative Support and Oversight of Medication
Therapy
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Pharmacist Service Integration
Patient / Consumer
Service Delivery: Mini Clinic
Prevention
Rx Acquisition / Distribution
Evaluation: Severity / Level of
Care
Triage
Coordination
Cost Management
Clinical Evaluation: CMR /
MTM
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Payment Models
Capitation – ACA, Medicare/Medicaid
Best-in-Class / Centers of Excellence
Risk Assumption – Health Plans (insurers), Patients,
Providers, State/Federal Government
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Value-Based Objectives
Maximal Therapeutic Benefit
Minimum Acceptable Risk
Affordable Cost
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
Value Based Payment
Outcomes
Evaluation & Treatment
Prevention
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies 20
Key Forces Defining the Future
Political Transparency
Information Sharing Team Based ACO / PCMH
Oversight by Data Analytics
Economic Value → Payment
Cost Plus Supermarket of prices
Peer-to-Peer Comparisons International Competition
Behavior Modification of Providers
Social Patient Focused
Price Sensitive Consumer International Communication
Patient Advocacy Groups Targeting / Profiling by Data
Analytics
Technological New treatments + diagnostics
Management by Data Analytics Cheap Communication
Free exchange of information Superhighway / Supermarkets
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2016 AAP Annual Conference
Empowering Independent Pharmacies Empowering Independent Pharmacies
PRO PHARMA PHARMACEUTICAL CONSULTANTS, INC.
P.O. Box 280130
Northridge, CA 91328-0130
(818) 701-5438
(818) 701-0249 Fax
Visit our website at:
www.propharmaconsultants.com
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